China's Automotive Semiconductor Market Grows to $419.15 Billion by 2024

The Expanding Landscape of China's Automotive Semiconductor Market



The automotive sector in China is experiencing a dramatic transformation, particularly within the semiconductor market, which is poised to reach a staggering $419.15 billion by 2024. This growth, observed from a previous $280.81 billion in 2020, represents a compound annual growth rate (CAGR) of 8.9%. Various factors contribute to this upward trajectory, as the nation evolves into a hub for electric vehicles (EVs) and sustainable automotive technology.

Driving Factors Behind Growth



China’s automotive semiconductor market is bolstered by its position as the world’s largest EV market. With government support for new energy vehicles (NEVs) and a community increasingly focused on advanced vehicle technologies, automakers are intensifying their efforts to innovate. This innovation includes integrating advanced driver assistance systems (ADAS), AI-enhanced infotainment systems, and over-the-air (OTA) updates for software improvements in vehicles.

A significant trend is the development of next-generation electrical and electronic (EE) architectures. Centralized domain controllers and software-defined vehicle platforms are now becoming prevalent, facilitating the creation of smarter, connected, and upgradable vehicles. Consequently, the demand for automotive chips has surged, particularly for power semiconductors, AI processors, and solutions for high-speed connectivity.

Microcontrollers: Core Components



Within the automotive semiconductor landscape, microcontrollers (MCUs) dominate, accounting for the highest share of the market. The thriving manufacturing ecosystem in China, along with government initiatives aimed at achieving semiconductor self-sufficiency—like the 'Made in China 2025' policy—have enabled this robust growth.

The local industry is keen on enhancing production capabilities, stabilizing the manufacture of automotive-grade chips at the 14 nm process node while investing in 7 nm technology. Companies such as SMIC have made strides with mass production, achieving impressive yield rates for their chips, which are vital for critical automotive applications. The continued rise in EV sales, surpassing 11 million in 2024, further strengthens the case for MCUs.

Key players like Midea Group, known for its shift into MCU production for home appliances, GigaDevice, and AutoChips are paving the way for future advancements. This involves a focus on research and development for next-gen automotive MCUs, energy efficiency improvements, and building a resilient supply chain.

Power Semiconductors on the Rise



Another noteworthy segment in China's automotive semiconductor market is power semiconductors, which are rapidly gaining traction due to the electrification of vehicles. Traditional internal combustion engine (ICE) vehicles utilize far fewer power semiconductors compared to EVs, which rely on these components for functionalities such as inverters and onboard chargers.

Silicon carbide (SiC) and gallium nitride (GaN) devices are now prevalent for a variety of components, including drive inverters and high-power charging systems. SiC devices are particularly beneficial in 800V architectures prevalent in new electric vehicles, while GaN is recognized for its efficiency.

With added features like ultra-fast charging and vehicle-to-grid (V2G) capabilities, the demand for durable and effective power semiconductor solutions is skyrocketing. The ongoing roadmap highlights a commitment to further electrification and pioneering autonomous driving technologies, setting the stage for continued growth in this sector.

Hong Kong: The Gateway for Integrated Circuits



Hong Kong stands out as the largest importer of integrated electrical circuits from China, due to its strategic positioning as a trade hub. Often, these integrated circuits (ICs) are re-exported or utilized within local manufacturing. The strong global demand for electronics further drives this trade, particularly in sectors like automotive and IoT devices.

In fiscal year 2024, China exported nearly 89.39 million integrated circuits to Hong Kong. This relationship is solidified by extensive investments in R&D and the continuous development of trade infrastructure, largely influenced by initiatives like the Belt and Road Initiative.

Conclusion: A Future of Innovation and Growth



As the automotive industry in China continues to innovate, the semiconductor market is expected to lead the way in technological advancements. With the backing of strong domestic policies, significant investments in local development, and an increasing focus on sustainability, the future looks promising for the automotive semiconductor sector. With leading companies solidifying their presence and emerging technologies paving the path forward, China is well on its way to transforming the automotive landscape.

As the semiconductor industry evolves, staying updated will be crucial for stakeholders and consumers alike, marking a new era in automotive technology that prioritizes efficiency, connectivity, and innovation.

Topics Consumer Technology)

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